We have good Litecoin news today, which seems strange. LTC has had a long cold streak…
The Litecoin to USD exchange rate appreciated 10.68% on Wednesday morning, finally breaking past the crucial $60.00 threshold. It reached $62.72 at the time of writing.
It was a major price movement for the downtrodden currency. Litecoin prices have lagged behind Bitcoin despite most investors calling it the “silver to Bitcoin’s gold.”
By its nature, this comparison to precious metals should imply that LTC and BTC trade at a steady ratio. In other words, if Bitcoin prices surge, investors will arbitrage the difference until Litecoin prices also surge.
Gold experts call this the “gold-to-silver ratio.” (Clever title, right?)
The idea that a similar relationship exists between Bitcoin and Litecoin is often discussed on forums and chats, but it has not been formalized yet. The industry is simply too young.
Nonetheless, traces of this pattern are beginning to emerge. Take today, for instance…
LTC advanced 7.38% against BTC. Might this suggest a rebalancing after weeks of Bitcoin’s rapid growth? Possibly.
Bitcoin had left Litecoin eating dust as its prices roared past $6,000, $7,000, and most recently, $7,400. Now, Litecoin makes double-digit gains without draining money from Bitcoin—does that really look like a coincidence?
It’s also rather obvious that this momentum came from South Korean trading desks. Almost one-third of all trading volume came from Bithumb, a Korean exchange that trades LTC/KRW pairs. It helped raise volume by 201% from the previous day.
Also, the average bid on Bithumb was higher than Litecoin’s current price, suggesting that investors on this exchange were bidding up the price.
Daily Litecoin Chart
Since the Litecoin surge was driven by South Korean trading desks, we expect more volatility through the remainder of the week. Traders make money on price swings, after all. We will not, however, revise our $200.00 Litecoin price forecast for 2018.